UPS eliminates non-profitable volume to make way for high margin packages, while also preparing to move COVID Vaccine.

We all have seen the shift from the major carriers trying to deal with capacity constraints and the residential surge. In addition, the onslaught of Peak surcharges and rate increases would make any shipper’s head spin. News of carriers going out to long time customers, both Commercial and Residential, delivering an ultimatum dictating volume limits, time constraints, and increased rates are becoming more commonplace.
One has to ask themselves the fundamental question…why? Well the short version is that each customer is being looked at under the profitability microscope. If they pass, then all is well. If not, then let the adjustments begin.  

UPS is trying to clear out non-profitable packages in the network to make way for high margin pharmaceutical packages, such as a potential COVID vaccine. UPS has been investing in the Bio/Pharma segment for years and clearly has continued to target resources to do so. Additional Capital Expenditures in acquiring refrigerated trailers and containers remains a priority. Let us not forget building facilities, such as the one in the Netherlands to expedite worldwide distribution of both pharma and a possible COVID vaccine.

Teamsters Canada/UPS Negotiation Update 
Customers who ship to, have operations in or who are simply thinking of expanding their market to our neighbors to the North need to be aware of the latest updates in Teamster Canada negotiations with UPS
As of last update (September 11, 2020) there was a 97.1% “in favor of strike action” agreed to by the members of the local Teamsters.

Negotiations have lasted longer than most heavyweight fights. According to Teamsters Canada officials, a “last best and final” Round #7 offer was presented by UPS on September 19, 2020. Voting has been taking place over the past few weeks. AFMS will continue to monitor for the results. Updates are also available by visiting
Warning flags abound. 2021 will be the most challenging time for shippers to figure out how all this works and negotiate on their own. Keep in mind that UPS has not announced their 2021 general rate increase.  

As always, these changes will affect each company differently.  Let AFMS help you sort out the changes and how they will impact your business. Contact AFMS for a detailed analysis or consultation or call 800-246-3521.  

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